A “DIRT file” was compiled on Lord Ashcroft, the former Conservative Party treasurer, by government officials and was used to prevent him receiving a peerage, the High Court was told yesterday.

The Conservative donor, who became a peer after his second nomination by William Hague, is seeking to expose the secret way people have been appointed, or blocked, as new Lords.

He is asking Mr Justice Gray to order the Foreign Office, the Department for International Development and the Cabinet Office to disclose 56 files compiled on him.

Lord Ashcroft claims he had his elevation to the peerage “maliciously nobbled” on the basis of “rumours and media gossip” in 1999.

Foreign Office officials in the 1990s had “collected dirt” about Lord Ashcroft, none of which could be substantiated, but parts of which were leaked to the press.

His barrister Mark Warby, QC, told the court: “He believes, with reason, that both the rejection of his nomination, and the leaks, involved politically inspired abuse.

“He wants to find out who was responsible and how it was done, and if and when he finds out, will consider proceedings against the person or persons responsible.”

One Foreign Office mandarin wrote on a memo that Lord Ashcroft “was ‘in love’ with Princess Diana a few years ago”. He wrote a note describing Lord Ashcroft as “a bit dodgy” for a Caribbean trade post the businessman was seeking.

Another diplomat wrote in a handwritten Foreign Office internal report that Lord Ashcroft was “constantly in Private Eye for various political pay-offs”.

The same official mistakenly claimed that Lord Ashcroft ran a wallpaper company that collapsed — it had been a John Ashcroft. The diplomat wrote to his superior: “I attach a file which has some but not all of the dirt.”

Tony Blair’s letter to William Hague rejecting Lord Ashcroft’s nomination to the peerage was presented to the court.

In response, Mr Hague had written to the Prime Minister disclosing that Lord Ashcroft, the founder of Crimestoppers, “was the anonymous businessman who recently offered a £50,000 reward for information leading to the arrest and conviction of Jill Dando’s killer”.

In a document marked “restricted”, Lord Thomson of Monteith, chairman of the Political Honours Scrutiny Committee, had written to Mr Blair outlining concerns about Lord Ashcroft.

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